So you want to be in Real Estate – Part 1 ©
My years in the real estate business were a constant struggle, but I studied, learned, and survived…Now after 50 years in the business, I have absorbed a few lessons I am happy to pass down to both young and old who want a career in the industry…Some of you will think I’m a bit jaded, but these are the cold hard facts about the business that Bravo TV’s Million Dollar Listing of Los Angeles and New York won’t teach you…
First, What to major in when in college…
Major in Psychology or Sociology or even Theatre, but not Macramé…Why, because real estate is a “people business”, you are performing a role all the time and everything you do is how someone interpets your actions or non-actions…Many will tell you to major in Finance, Real Estate, or Economics (you can always minor in these to cover all bases) and those degrees look great on a resume’ especially if you want to go to work for Goldman Sachs or get into commercial banking, development or investment partnerships for national or international companies…
However, the REAL money is in sales and if you want to make that great money you have to recognize your clients’ and opponents’ motivations…You need to UNDERSTAND their desires and the bottom line unless you are doing major regression analyses and annual lease income projections, etc. those degrees are not the key to success in sales...And, with financial calculators today, most the economic evaluations are duck soup…
Also without shameless self-promotion intended, read my book, Untold Stories of a Real Estate Diva…Learn from experienced histories…
Second, Get broader specific real estate education…
Once you are working in the business, take all the seminars and extra real estate courses offered by mortgage companies, financial planners, real estate boards, small business organizations, etc. that you can…They are very specific to your practice and a lot of them are free and many will stop you from getting sued down the line…
And believe me, you will get sued at some point if you are long enough in the business because you must have Errors and Omissions Insurance to practice and disgruntled clients and their attorneys LOVE this part about our business…You can do everything right, but often you will become collateral damage for a minor mistake done by you or someone else and that will be enough to cost thousands of dollars to your insurance company, increase your premiums six-fold, and damage your reputation…So educate yourself to not make that mistake…
Third, Persistence and long hours…
You will need to work long hours and study the markets, often you will become a specialist in a certain niche; mid-range homes, apartment buildings, luxury condominiums or houses, retail, or office space, etc.…You will need to spend many hours learning and schmoozing with and about folks you don’t like and going to functions to “be seen” with food you hate because you have to be present and social…Remember, you are playing a “role”…
Also in your first few years, with your hard earned dollars you have struggled to make, you will have to have a wardrobe that is better than your high school blazer you wore for graduation and a descent car and it will take you YEARS to pay these debts off, so more work and time will be required for these debts, but it’s all a part of the “game” of looking good and playing the character of the “expert”…
Fourth, Do not ever show your cards…
When you first start into the game of real estate and really forever, don’t forget to wear your “big girl panties” or your “cup” because people who you think are your friends will often try to steal your clients and lie about your skills…When you start off, your commissions will be small, the average beginner makes about $45,000 to $65,000…Not a bad income…but when you graduate into the big leagues after a few more years, your income can easily move into the half a million range or more annually, especially if you can get on luxury projects where most of the time you just need to look well groomed and be interesting enough to discuss current events so you can register and sign the new owners up…That makes for many envious people…So guard yourself well and do NOT let anyone know how much or how little money you are making except your accountant and maybe, your priest…
Fifth, Learn to Play Golf…
Forget pickle ball, that’s for you after you have made your first million or two…Golf is your new sport…Take lessons so you are not a burden on the course…I shoot 120 on a good day for 18 holes…I tell folks I get my workout and money’s worth for my course fees…I’m not good, I shoot straight, but short, chip lousy, and putt great and I keep up…
Golf is all about schmoozing and people learning about you and your character…Are you polite or an egoistical drama queen because someone may have a higher handicap than you and blow you out of the end of the day for that prize of a free dinner somewhere…
And everyone watches you and wants to know, do you cheat…Cheating equates to lying and if you cheat; picking up your ball and placing it in a better spot without telling or not counting your stokes, people will notice and your reputation will be shot…Cheating will deny you the ability to break into the big leagues...No one wants a cheater on any levels in their camp…If you can become good with a low handicap or if you continue to shoot 120 with a handicap of 36 like me, it will open a lot of doors for you and win you a dinner or two…
Sixth, Becoming an Investor…
After a few years, you may feel you know the business and want to grow your money by investing in real estate…You have read “Rich Dad, Poor Dad” by Robert Kiyosaki and it can’t be that hard if Donald Trump can do it, so you think, you can too…Then you and maybe a buddy or two form a partnership and decide to purchase a fixer upper house or condominium to renovate and flip for a quick profit…
You set up a plan…Someone is in charge of renovation because they believe they are the best stager in the market or was a fabulous interior designer in another life, another is the property manager to manage the money for the mortgage and reserves for overruns and talking to your banker because after all, they majored in Finance, and the third concentrates on selling it FAST because he’s the biggest schmoozer you have ever met and he majored in Theatre…A faster sell, less overruns, and more money to the partnership…
The first two or three deals work out great…The market is smoking hot and everything is clicking…This is so easy, you think why didn’t I do this years ago, BUT then it happens…
The market pops in what seems just overnight…Stock market goes to Hell, the interest rates go up and your credit card loan amounts, which you used to finance a lot of your day-to-day activities get locked down so you can’t pay your personal bills and rent…
Now what…Well that’s for Part 2, Property Management, Tenants from Hades, Squatters, Hoarders, Unauthorized Pets, Drugs, Baby Mamas and Daddies, Why do we need Appraisers, etc…